The Non-Profit Debt Consolidation Solution
In recent years, more and more people who consider themselves financially responsible have fallen into what seems like unmanageable debt. Whether debts are caused by long spells of unemployment, health problems, education costs or something else, they can quickly spiral out of control. In addition to the financial worry, many people also grapple with shame and fear around their debts, and that sometimes prevents them from dealing with the problem.
To make matters worse, there are a number of shady enterprises that use misleading language to make it sound as though they are going to help debtors, but what they will really do is ruin the debtors’ credit rating and sometimes leave them in an even worse position financially. Bankruptcy can start to seem like the only solution. Debtors have another option, however, and that is a debt consolidation non profit service.
How Debt Consolidation Works
A debt consolidation non profit service should not be confused with either a debt consolidation loan or debt settlement program. A debt consolidation program will negotiate with the debtor and the creditors to agree upon a payment plan the debtor can handle.
Preparing for an Appointment
A person who chooses to work with a debt consolidation program will begin with an appointment with a credit counselor. Prior to the appointment, the debtor should make a detailed budget. The credit counselor will require information on money spent for everything from rent to groceries to incidentals. Using the budget information given, the credit counselor will determine the debtor’s eligibility for the program and will also provide further budget counseling or referrals if needed.
The debtor can visit a debt consolidation company in person or can conduct the initial counseling session over the phone.
Setting Up and Completing the Program
The debtor will then be entered into a debt consolidation program in which an agreed-upon sum is paid to the organization and then distributed among creditors. In this way, debtors can repay debts in a matter of months or just a few years and restore their credit.